MNI BRIEF: Rising UK Energy Costs Challenge BOE, Stats Office

UK household energy prices will rise sharply from October 1, when the next pricing readjustment under the regulated pricing caps kicks in. Earlier Friday, Ofgen, announced an increase in the cap to GBP3,549 from the current GBP1,971.

At present, that increase will confirm Bank of England fears and drive a sharp increase in consumer price inflation in Q4, pushing headline price rises in excess of 13% y/y. However, the actual rate may yet be mitigated lower, depending on how any further financial aid to households by the government -- and how the current planned payments -- are treated by the Office for National Statistics.

In the latest inflation report, the ONS said "decisions on whether to include rebates, subsidies and discounts in our consumer price inflation statistics are not clear cut and are taken on a case-by-case basis." How the ONS will treat the aid announced by the BIES in May will be published on August 31. Any assistance offered by the incoming UK government will be addressed at a later date. The ONS thinking ahead of the decision is outlined on their website.

Higher energy costs are another in a long line of rising costs for UK households, as MNI highlighted earlier Friday